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Price trendsAmsterdam housing market in spring 2009: opportunity beckons!The financial crisis and the recession have severely dented consumer confidence in the housing market. Many potential buyers are postponing the purchase of a new home in anticipation of further price falls. Uncertainties over employment have also dampened demand for housing. As the crisis broke, house prices were widely expected to decline, with some ‘experts’ even predicting a free fall of 30% to 40%; in the second half of 2008 the number of transactions retreated sharply. At the end of the first quarter of 2009 it was found that the average purchase price had only decreased by 7.7% compared to the previous year, posing a sharp contrast with the average price increase of 14% in 2007. The recession has resulted in a correction in the market and has made housing more affordable. It is clearly too early to say that the market has bottomed out, but we do notice more activity in the market as a growing number of buyers resume their search for a home. There seems to be an awareness that prices are unlikely to fall much further; and the higher segment is also picking up. Historically, the housing market has always been particularly buoyant in the spring; evidently, the better weather lifts sentiment. But the extent to which this seasonal influence is driving the current trend is impossible to say. New houses coming onto the market are being sold more quickly and buyers are also coming forward for properties that have been on the market for several months. However, buyers are clearly less opportunistic; they no longer assume that property will rise rapidly in value and are also less bullish about their own salary expectations. While most buyers used to apply for the maximum loan, many are now treading more cautiously. Interestingly, the market could already have been a lot more lively if the banks had passed on the interest rate cut of the European Central Bank to their customers. Unfortunately, they opted instead to fatten their own margins, thus giving interest rates a slightly upward trend rather than the downward trend that buyers are eagerly awaiting. |
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